Exhibit 10.2
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this "Agreement") is dated as of July 1, 2001,
between Gary C. Granoff ("Consultant"), Ameritrans Capital Corporation
("Ameritrans"), and Elk Associates Funding Corporation ("Elk") (collectively,
Ameritrans and Elk are hereinafter referred to as the "Company").
1. ENGAGEMENT
The Company hereby engages and retains Consultant to perform the Services
(as that term is hereinafter defined), and Consultant hereby accepts such
appointment on the terms and subject to the conditions hereinafter set forth and
agrees to use his best efforts in providing such Services.
2. INDEPENDENT CONTRACTOR
Consultant shall be, and in all respects be deemed to be, an independent
contractor in the performance of his duties hereunder, any law of any
jurisdiction to the contrary notwithstanding. Consultant shall not, by reason of
this Agreement or the performance of the Services, be or be deemed to be, an
employee or agent of the Company, and Consultant shall have no power to enter
into any agreement on behalf of, or otherwise bind the Company. Without limiting
the foregoing, Consultant shall not enter into any contract or commitment on
behalf of the Company without the Company's prior written consent.
3. COMMENCEMENT AND TERM
3.1. Commencement. This Agreement shall not be effective and shall not
commence unless and until the Employment Agreement between the Company and
Consultant dated July 1, 2001 (the "Employment Agreement"), is terminated due to
(i) the voluntary resignation of Consultant from his employment pursuant to
Section 6.2 of the Employment Agreement or (ii) a notice of non-renewal from the
Company or Consultant pursuant to Section 6.2 of the Employment Agreement.
3.2. Term. Provided the Employment Agreement is terminated pursuant to
clauses (i) or (ii) of Section 3.1, above, this Agreement shall commence upon
the date of termination of the Employment Agreement (the "Commencement Date"),
and shall continue for a period of five (5) years (the "Consulting Period").
4. SERVICES
4.1. Consultant agrees to provide the following services, hereinafter
collectively referred to as the "Services":
Serve as business consultant for the Company, which shall include, but not
be limited to, general advice and consultation regarding the business and
operations of the Company, investor relations, and providing assistance in
setting the business direction and strategic objectives of the Company.
4.2. BEST EFFORTS. Consultant shall devote such time and effort as he deems
commercially reasonable under the circumstances to the affairs of the Company as
is reasonable and adequate to render the consulting services contemplated by
this Agreement; provided, however, in no event shall Consultant be required to
devote more than half-time or twenty (20) hours per week to the
performance of the Services. It is further understood and agreed by the parties
that Consultant shall make himself available, and the non-use of Consultant by
the Company shall in no manner affect the Company's obligations to make the
payments provided hereunder.
5. COMPENSATION AND RELATED MATTERS
5.1. Compensation. In consideration for his availability and/or providing
the Services, Consultant shall be paid an amount equal to one-half (1/2) of the
sum of (i) Consultant's monthly Base Salary that was in effect at the time the
Employment Agreement was terminated, and (ii) any Bonus that the Board at its
discretion may authorize. All capitalized financial terms having the meanings
defined in the Employment Agreement are herein incorporated by reference.
5.2. Other Benefits. During the Consulting Period, subject to and to the
extent Consultant is eligible, Consultant shall be entitled to receive fifty
percent (50%) of the benefits, set forth in Section 4.3 of the Employment
Agreement, that Consultant was receiving from the Company at the time of
termination of the Employment Agreement and at the levels in effect at the time
of such termination, except for the following, to which Consultant shall be
entitled to the same extent as under the Employment Agreement, (i) premiums on
disability insurance not to exceed $5,500 per annum, (ii) husband and wife
medical coverage, and (iii) the contributions to Consultant's SEP IRA, which
shall continue at up to 15% of Consultant's fee compensation.
5.3. Expense Reimbursement. The Company shall reimburse Consultant for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement in accordance with the Company's procedures and policies as
adopted and in effect from time to time and applicable to its senior management
employees.
6. TERMINATION
6.1. Voluntary Termination by Consultant. Consultant may, by notice to the
Company at any time during the Consulting Period, upon thirty (30) days' prior
written notice, terminate this Agreement.
6.2. By the Company for Cause. The Company may, at any time during the
Consulting Period, by notice to Consultant, terminate this Consulting Agreement
for "Cause." As used herein, "Cause" shall mean (i) incompetence, fraud,
personal dishonesty, defalcation, or acts of gross negligence or gross
misconduct on the part of Consultant, (ii) substantial and continued failure by
Consultant to perform the Services, (iii) Consultant's conviction by a court of
competent jurisdiction of, or pleading "guilty" or "no contest" to, (x) a
felony, or (y) any other criminal charge (other than minor traffic violations)
which has or could reasonably be expected to have a material adverse impact on
the Company's reputation and standing in the community, or (iv) Consultant's
violation of any of the provisions of Section 8 herein. Any notice given by the
Company pursuant to this Section 6.2 shall specify in writing in reasonable
detail the event or the nature of Consultant's action or inaction that is the
cause for giving such notice. Consultant will have 30 days to cure, to the
reasonable satisfaction of the Company, any action or inaction charged by the
Company for Cause under (ii), above. In the event of a termination of the
Consulting Period for Cause under (i), (iii), or (iv), above, the Consulting
Period shall terminate immediately upon notice by the Company of termination for
Cause and the reason therefor, unless such actions or inactions can be cured and
Consultant has satisfactorily cured such actions or inactions.
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7. TERMINATION COMPENSATION
7.1. Termination by Consultant. If Consultant terminates this Agreement in
accordance with Section 6.1 or Section 6.2, the Company shall pay to Consultant,
within thirty (30) calendar days of the date of termination, Consultant's Fee
through the date of termination.
7.2. Certain Other Terminations. If the Consulting Period is terminated by
the Company for Cause pursuant to the provisions of Section 6.2, the Company
shall pay to Consultant, within thirty (30) calendar days of the date of
termination, Consultant's Fee through the date of termination.
8. CONFIDENTIALITY
Unless otherwise required by law or judicial process, Consultant shall
retain in confidence during the Consulting Period and after termination of this
Agreement all confidential information known to Consultant concerning the
Company and its businesses. The obligations of Consultant pursuant to this
Section 8 shall survive the expiration or termination of this Agreement.
9. NONCOMPETITION
Consultant shall not directly or indirectly, whether by way of employment,
consulting, advising, ownership, partnership, joint venture, or other method,
engage in any Competitive Activity (as defined below) during the Consulting
Period. "Competitive Activity" shall exclude those activities described in
Section 3 of the Employment Agreement and shall include business activity which
is the same as or substantially similar to or is or would be competitive with
the business activity in which the Company is engaged during the Consulting
Period.
10. NONSOLICITATION
During the Consulting Period and for a period of one year thereafter (the
"Nonsolicitation Period"), Consultant shall not directly or indirectly solicit
to enter into the employ of any other Entity, or hire, any of the employees of
the Company. During the Consulting Period, and for a period of one year
thereafter, Consultant shall not, directly or indirectly, solicit, hire, or take
away or attempt to solicit, hire, or take away (i) any customer or client of the
Company or (ii) any former customer or client (that is, any customer or client
who ceased to do business with the Company during the three (3) years
immediately preceding such date) of the Company or encourage any customer or
client of the Company to terminate its relationship with the Company without the
Company's prior written consent. The obligations of Consultant pursuant to this
Section 10 shall survive the expiration or termination of this Agreement.
11. SUCCESSORS; BINDING AGREEMENT
This Agreement and all rights of Consultant hereunder shall inure to the
benefit of and be enforceable by Consultant and Consultant's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
divisees, and legatees. If Consultant should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Consultant's devisee, legatee, or other beneficiary or, if
there be no such beneficiary, to Consultant's estate.
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12. SURVIVORSHIP
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
13. MISCELLANEOUS
13.1. Notices. Any notice, consent, or authorization required or permitted
to be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, by
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally delivered or sent by facsimile transmission
(deemed given upon receipt), or at such other address as either party shall
designate by notice given to the other in the manner provided herein.
If to the Company: Ameritrans Capital Corporation
Elk Associates Funding Corporation
747 Third Avenue, 4th Floor
New York, New York 10017
Attn:
If to Consultant: Mr. Gary Granoff
2 Fir Drive
Great Neck, New York 11024
13.2. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to the principles of conflicts of laws therein.
13.3. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
the city in which the Company's main corporate headquarters is then located in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
13.4. Headings. All descriptive headings in this Agreement are inserted for
convenience only, and shall be disregarded in construing or applying any
provision of this Agreement.
13.5. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, together, shall
constitute one and the same instrument.
13.6. Severability. If any provision of this Agreement, or any part
thereof, is held to be unenforceable, the remainder of such provision and this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.
13.7. Entire Agreement and Representation. This Agreement and the
Employment Agreement contain the entire agreement and understanding between the
Company and Consultant with respect to the subject matter hereof. No
representations or warranties of any kind or nature relating to the Company or
its several businesses, or relating to the Company's assets, liabilities,
operations, future plans, or prospects have been made by or on behalf of the
Company to Consultant.
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13.8. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect. If any provision of this Agreement is held to be invalid,
void, or unenforceable in any jurisdiction, any court or arbitrator so holding
shall substitute a valid, enforceable provision that preserves, to the maximum
lawful extent, the terms and intent of such provisions of this Agreement. If any
of the provisions of, or covenants contained in, this Agreement are hereafter
construed to be invalid or unenforceable in any jurisdiction, the same shall not
affect the remainder of the provisions or the enforceability thereof in any
other jurisdiction, which shall be given full force and effect, without regard
to the invalidity or unenforceability in such other jurisdiction. Any such
holding shall affect such provision of this Agreement, solely as to that
jurisdiction, without rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal, or unenforceable because its scope is
considered excessive, such covenant will be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal, and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
AMERITRANS CAPITAL CORPORATION
By: /s/ Ellen M. Walker
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Ellen M. Walker
ELK ASSOCIATES FUNDING CORPORATION
By: /s/ Ellen M. Walker
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Ellen M. Walker
/s/ Gary C. Granoff
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Gary C. Granoff
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